Lagarde Says ECB Plans to Raise Rates 50 Bps in March

In Q4 2022, the economy showed resilience despite challenges from Russia's war and the energy crisis, aided by improved supply conditions and fiscal support. Inflation was 8.5% in January, with energy prices dropping but still impacting consumer prices. Wages are rising due to strong employment, with inflation expectations around 2%. Risks to growth and inflation are more balanced, with the ongoing Russia-Ukraine conflict posing a downside risk. The ECB raised interest rates by 50 basis points in February and plans further hikes to address inflation pressures.

What was a key factor that helped buffer the adverse economic effects in the fourth quarter of 2022?

• Decreased government spending

• Higher interest rates

• Improving supply conditions and fiscal support

• Increased consumer spending

What was the inflation rate in January, excluding energy and food?

• 2.0%

• 5.2%

• 6.3%

• 8.5%

What is a significant downside risk to the growth outlook mentioned in the transcript?

• Decreasing consumer confidence

• Increasing unemployment rates

• Rising global interest rates

• Russia's war against Ukraine

What decision did the ECB make regarding interest rates at their latest meeting?

• To maintain current interest rates

• To raise interest rates by 50 basis points

• To decrease interest rates by 25 basis points

• To raise interest rates by 75 basis points

What is the ECB's plan for interest rates in their next meeting in March?

• To raise interest rates by 25 basis points

• To maintain current interest rates

• To decrease interest rates

• To raise interest rates by another 50 basis points